24983003 Marketing of Services

8/9/2019 24983003 Marketing of Services

1/37

Shrikant Kulkarni


2/37

Services

y Activity or benefit that one party can offer to another

that is essentially intangible and does not result in the

ownership of anything. Its production may or may not be

tied to a physical product.

2MITES - Shrikant Kulkarni


3/37



4/37



5/37



6/37



7/37

The Problem of Service

Innovation

y

modern economies are both serviceeconomies and economies of innovation.

Paradoxically, they are not regarded as

economies of innovation in services... It is as

ifservice and innovation were two parallel

universes that coexist in blissful ignorance of

each other.



8/37

Services - Featuresy Intangibility

y Hard to grasp, concept is abstract

y Customer is unable to experience the product prior to

purchase

y Dramatization often necessary for concept

y Perishability

y Services cannot be stored or held in inventory.

y If not used when available, they go to waste.

y

Inseparabilityy Outlet accessibility can limit the area covered by the service.

y Image is important: Image affects the perception of the service.

y Consumer is present when service is produced.

y Hard to separate the service provider and the service



9/37

Services - Features

y Variability

y Service quality tends to vary considerably.

y Difficulty in establishing consistency in quality

y across Providers or within providers

y across Time

y across Delivery Centers

yNon-inventorability

y Heterogeneity

y Simultaneity



10/37

provide consumers with products /services at the lowest

total cost

product line offered to consumers is standardized and

limited

Products / services are highly reliable

customer service pursues the highest level of convenience

there is a high level of teamwork among employees in these

firms

MITES - Shrikant Kulkarni


11/37

yTailor offerings to meet individual needs

y Success through an increasingly fine understanding

of exactly what each customer needs and the ability

to deliver exactly these services and products

y Products / services are highly diverse and configured

y customer service pursues the highest level of

intimacy

y

If there is potential for long term growth, eachcustomer representative has wide latitude to meet

individual client needs, regardless of short term costs



12/37

Attempts to provide a steady stream of cuttingedge solutions

Willing to invest in high risk/high reward

ventures within narrowly focused areas of

expertise

products are narrowly focused, but very cutting

edge

These firms reward individuals that can seeunique solution opportunities, act independently

to develop unique solutions and bring these

solutions to market



13/37

y Transactional Selling to Consultative

Selling to Enterprise-Wide Selling



14/37

The 7S McKinsey model



15/37

Functions/Uses of7-S-Model

y Used for internal analysis of a company

y Analyze strategic characteristics of a company

y

Tool for determining the do ability of strategiesy Used to create alignment among various departments of an

organization

y Examines effect of change on a company

y Analyze the successful and dysfunctional aspects of anorganization



16/37

Weakness

y Focuses on internal fit of an organization

y Ignores effect of factors external to the

organization

Why 7-S Model

y Profitable, purposeful, efficient organizational

action cannot be successfully executed if internalelements are not aligned



17/37

Essence of the Framework

Hard S - rational and factual aspects: focuses on Strategy,Systems, and Structure.

y Strategy a plan of action to maintain competitive advantage over the

competition. The direction and scope of the company over the long term.

y Systemsmeasures and actions which accommodate the execution of dailyactivities . Formal and informal procedures that govern everyday activity,covering everything from management information systems, through to thesystems at the point of contact with the customer (retail systems, call centresystems, online systems, etc).

y Structure the way the organization is structured, who reports to whom.The basic organization of the company, its departments, reporting lines,areas of expertise, and responsibility (and how they inter-relate).



18/37

Essence of the Framework

Soft S - social and interpersonal behavior: focuses on Style,Shared Values, Staff, and Skills

yStyleThe leadership approach of top management and thecompany's overall operating approach

y Shared Values company culture, work ethics etc ,Ultimately theyguide employees towards 'valued' behavior.

y Staffcompany employees and their capabilities i.e. how they aredeveloped, trained, and motivated.

y Skillscore competencies of the company as well as that of its staff



19/37

Application of the Framework - Strategy

Global strategy Multidomestic strategy Adjust products and

operations according to eachcountryor market served

Standardization ofproducts, processes andoperation around theworld

Source: Strategic Management. Pitt and Lei, 2003



20/37

Application of the Framework - Systems

Web Server

Database ServerApplication Server

Country 1

Country 2

Country 3

These 3 servers represent the USwebsite, ERP, and database server

In each country, a copy of the ERP

is installed with modifications toaccommodate languageA version of the website in each

Country is created and hostedThe local ERP and website use

the local database serverThe local database issynchronized with the central

database server in Boston severaltimes daily.

*Because al l locations use the sameDatabase design and have the same basic

operations th is model becomes highlymodu lar and easy to implement multiple

times.

International

Data Warehouse



21/37

Application of the FrameworkStructure

Geographic Division Structure

y Hierarchical -Two way open communication

y Self contained product/function to meet local

needs

y Promotes a high level of decentralization



22/37

Application of the FrameworkStyle

The competitive executive

y Flexible and adaptive to Stakeholders needs

y Seizes and exploits opportunities

y Focuses on increasing the companys share of

market at a profit



23/37

Application of the Framework-

SharedValuesMaintenance of the firms corporate culture

globally

y Strong work ethics among new employees

y Healthy balance of competitiveness and cooperationamongst applicants



24/37

Application of the Framework - Staff

y Recruitment of new consultants in their respectivecountries

y Attract experienced employees at other firms

y Offer incentives which should be determined by the

culture of the country

y Provide additional training



25/37

Application of the Framework - Skills

Skills for an International Market

y Communication, Administrative, Finance and Accounting,Customer Service, Marketing, Product Development, IT

y High Level of linguistic capabilities

y Examine foreign recruitment opportunities

ySeek the best job techniques for individual countries

y Exposure of US based consultants to the globalmarketplace



26/37

Globalization of services

y The pace of technological change in ICT in recent years has led torevolutionary changes in the processing and dissemination of data and to theemergence of an information society.

y The combination of information technology and telecommunicationstechnology has greatly enhanced existing service industries and has led to aspin-off of numerous new ones.

y Many different services can be provided through a single network; a givenservice can be provided through multiple networks using different

technologies.

y Competing in a flattening world.



27/37

Knowledge Servicesy

Adding high value through advanced analytical and technical skills

This includes:

y Research and work on intellectual property, equity and finance,analytics, market research, clinical research and data managementamong others

y Legal off-shoring services business is also part of this domain. Theseservices could include the entire spectrum of work related to intellectualproperty from preparing patent applications to IP commercialization

y Outsourcing engineering and design work involving plant design, chipdesign, and animation.

y Judgement-based work in education and publishing businesses, medicalcontent and services



28/37

Gap Analysis



29/37

Gap Analysis

y Gap analysis is a survey instrument used to determine the gaps

between a service offered and a customers expectations.

y Gap1: Customers expectations versus management perceptions

y Gap2: Management perceptions versus service specifications

y Gap3: Service specifications versus service delivery

y Gap4: Service delivery versus external communicationy Gap5: The discrepancy between customer expectations and their

perceptions of the service delivered

y Gap6: The discrepancy between customer expectations and employees

perceptions

y Gap7: The discrepancy between employees perceptions andmanagement perceptions



30/37

SERVQUAL

y

The marketing research team of Parasuraman, Zeithamel,and Berry created this service quality measuring tool in

1988

y The instrument can enable organisationsy To identify and understand where service gaps exist within the organisation and

between the organisation and its customers

y Prioritize those gaps in terms of relative impact on quality of service

y Identify the reasons for the existence of those gaps

y Develop a programme of activities to close those gaps

y Implement an appropriate set of processes to continuously review and refine

customer service quality

y SERVQUAL is not a measurement to compare and rank separate companies

but only to provide a measure for managers to determine actions needed in

their own services



31/37

Five Generic Dimensions of Servqual

y

Tangibles: appearance of physical facilities, equipment,personnel, and communication materials

y Reliability: ability to perform the promised service

dependably and accurately

yResponsiveness: willingness to help customers and

provide prompt service

y Assurance: knowledge and courtesy of employees and

their ability to convey trust and confidence

y Empathy: the caring, individualized attention the firmprovides its customers



32/37

SERVQUAL Applications

y SERVQUAL is widely used within service industries to

understand the perceptions of target customers regarding

their service needs. And to provide a measurement of theservice quality of the organization.

y SERVQUAL may also be applied internally to understand

employees' perceptions of service quality.With the

objective of achieving service improvement.



33/37

Steps in SERVQUAL Processy

Customers are asked to answer numerous questions withineach dimension that determines:

y The relative importance of each attribute.

y A measurement of performance expectations that would

relate to an "excellent" company.y A measurement of performance for the company in question

y Data is compiled

y Analysis of Data

y Item-by-item analysis

y Dimension-by-dimension analysis

y Overall Servqual Gap



34/37

Customized Servqual Instruments

y IT SERVQUAL

y Developed by Kettinger and Lee in 1994

y

Focused on information service attributesy Consisted of 22 items

y Service oriented IT Servqual

y Modified to incorporate specific service dimension within IT

industry

y 18 important items



35/37



36/37



37/37

Parasuraman,A.;Berry,LeonardL.;Zeithaml,Valarie A., SERVQUAL: A

Multiple-Item Scale For Measuring

Consumer Perceptions of Service Quality,Journal of Retailing, 1988, 64, 1, 12-40

Axel Hochstein,MANAGING IT SERVICE

QUALITY AS PERCEIVED BY THE

CUSTOMER: THE SERVICE ORIENTED IT

SERVQUAL

24983003 Marketing of Services

Documents

Transcript of 24983003 Marketing of Services